Ladies and gentlemen, we'll get the meeting started. Thank you for being here.

You probably know all of this, but by way of background, the minister responsible for Canada Post, the Honourable Judy Foote, has engaged in a very extensive consultation process on the future of Canada Post, trying to determine exactly what that future will hold. It has two phases. Phase one was the task force, which was assigned the mandate of trying to determine the financial sustainability and viability of Canada Post. The task force has completed its work and has submitted its report, which we have examined. Phase two is the cross-country tour, a consultation tour in which we speak with individuals, organizations, and urban and rural communities, including remote and first nations communities, to ask their opinions and for their suggestions on the future of Canada Post. That's why we're here today.

The process is quite simple. We're going to ask each of you to give a very brief, five-minute opening statement, to be followed by questions from our committee members. With that brief introduction, we will begin.

Ms. McGuire, I have you first on my list, so five minutes, please. The floor is yours.

Good morning, co-chairs, ladies and gentlemen, and honourable members of the Standing Committee on Government Operations and Estimates. Thank you for the opportunity to speak as a witness on the topic of Canada Post, an issue of significant concern for small and medium-sized businesses across the country, including many members of the Greater Charlottetown Area Chamber of Commerce.

The chamber serves as the voice of business on economic issues in the greater Charlottetown area. It provides services and opportunities for, and advocates in support of, its members to enhance their abilities to do business. Our jurisdiction is the greater Charlottetown area, which includes Stratford, Cornwall, and Charlottetown itself. We have close to 1,000 members, and the chamber reflects a diverse network of industry sectors and business professions.

We have taken the opportunity to review the discussion paper that was prepared by your independent task force. In response we'd like to present some of our initial observations, outlines, and some guiding principles the chamber feels are necessary to consider as Canada Post operations and services are reviewed and adjusted to adapt to the digital age.

There is no question that this committee faces a formidable task in evaluating the future of the Canada Post Corporation, particularly in balancing its mandate to operate in a financially self-sustaining manner with a commitment to providing quality postal services that meet Canadians' needs. Initial observations by the chamber, particularly in the review by our policy committee, are that transition and adaptation by Canada Post Corporation are inevitable. It is clear from the task force review that current operations are unsustainable, and the organization will only face increased challenges as the digital world evolves. We fully accept that Canada Post must explore alternative options to continue to increase potential revenues and substantially increase their savings.

At the same time, we made note of the review's assertion that businesses make up the largest portion of the users of Canada Post's services. Businesses represent the corporation's largest source of revenue, and we believe the significance of the facts cannot be underestimated. As the largest users of the service, the needs of businesses must be given an appropriate level of consideration.

As the committee moves forward with its review, the chamber and particularly our policy committee would like to strongly suggest some guiding principles on behalf of the business communities here in the greater capital region.

The chamber recommends that the committee continue to consider the importance of public postal service to Canadians, and particularly to small business, and that the committee make decisions regarding the future of Canada Post that are based on sound fiscal management.

It's well known that many small businesses continue to rely on the postal service for essential activities, such as invoicing and receipt of payment. Many of these businesses straddle a fine line between profit and loss, and in these uncertain economic times they are vulnerable to even small increases in their cost of doing business. These same businesses are the lifeblood of our Canadian economy and individual communities, and every increase in costs for them spells decreased profits, delayed hiring, and lost jobs for the rest of the economy. For this reason, rate increases by Canada Post should be considered extremely carefully, if at all.

It was notable in the task force's review that the majority of Canadian businesses expressed a favourable view of peer pricing. We do believe it would be worthwhile for the committee to examine the feedback further. Meanwhile, we know that the task force's discussion paper was considering changes to Canada Post. Businesses also place a high value on speed of delivery, reliability, and customer service.

As for the second principle that was noted, the chamber would like to emphasize the importance of building a future for Canada Post on the foundations of sound fiscal management. We recognize that in the short term some subsidization may be necessary during the adaptation process for the corporation to continue to provide the services Canadians and businesses expect and require. On behalf of business, the chamber urges Canada Post to continue to seek out ways to increase efficiencies and cope with increasing delivery costs. It is clear that over the long term, substantial streamlining of operations will be necessary if the corporation is to remain in existence. If it is to be truly self-sustaining, then Canada Post faces a major transition.

We appreciate the committee's efforts to consult Canadians thus far, and it's our hope that with the collective wisdom of Canadians and the business community, innovative solutions will be devised that maintain the essential integrity of this important public service while providing the flexibility to adapt to a changing era of communications.

Thank you again for this opportunity to provide comments on behalf of the business community, and I look forward to any questions you might have.

I'd like to thank the committee chair and honourable members for giving us this opportunity to speak.

I'd like to thank Penny for starting.

I come to you as a small-business person, I would even say a micro-business person. I'm also a graduate student at the University of Prince Edward Island, and I am studying youth and rural issues. As a small-business person and as someone who has academic interests in this area, I am really happy to be able to speak to you today.

I am part of a group of people who have small businesses on the Island, and the group called the Etsy Artisans of PEI, and Etsy, as you might have heard, is an online company that facilitates artisans, makers, and craftspeople selling their wares online. I am part of that group.

The group on P.E.I. has about a hundred members spread across the island. It's predominantly young people, women, and people living in rural communities, and for the most part, we rely on Canada Post to send our parcels. A lot of us don't have a brick-and-mortar presence on the island, so we rely solely on purchases from elsewhere, and through that, we rely on Canada Post.

It's an important service for a lot of us, and we see it as a public service. We don't necessarily see it as something that needs to be run completely as a private sector business. We tend to see it as something like a ferry service or as infrastructure. It's important for us to be able to market our products, and we see this as something that is as integral as health care or transportation.

Speaking to you as a graduate student studying rural and youth issues, services like this to people who want to live in a remote or rural area and start a business are of the utmost importance, and access to services in an equal and equitable way I see as being crucial for rural development and for youth retention on the island.

I really don't have much more to say, but I do believe that postal services like Canada Post are important for a rural place, and they're important for our island because we obviously have few connections to the mainland, and postal service is one of them.

I implore you to consider the impact of all the changes that are outlined in the discussion paper for young people, for rural businesses, and for small businesses and micro-businesses on the island.

Thank you, both, for coming. It's great to hear from the business community. We hear from a lot of different groups of Canadians in the business community, towns, and municipalities, and groups representing the aged or the infirm. We also hear from unions, so different groups provide different perspectives.

I'm very interested in the notion that rural Canadians can have access to a high-quality distribution infrastructure so that they can sell rurally manufactured products around the world.

Ms. MacDonald, can you tell us a little bit about the volume of sales that your hundred members might have, the times of delivery, what customers buying from Charlottetown expect in terms of delivery times, whether or not you're getting the type of service you need now, and how the service would need to change for you to continue to compete in the global market?

To begin, I do notice that there has been a change in the way that deliveries happen from rural parts of the island to central parts of the island and off-island. It is my understanding that now any parcels or letter mail are not sorted on the island. They go off the island before coming back to be delivered. Just as someone who is in a Master of Arts in Island studies program, leaving the island in that way just seems inefficient to me.

I notice that my peers in this group have said that they've been finding that there are delays in their deliveries. Everyday matters when you're trying to make a customer experience positive.

Yes, that was my point. What do your customers expect? Do you find that you're able to be competitive with someone from Halifax selling to Charlottetown, versus your group wanting to sell into your region or trying to sell off-island? Where do your sales come from? We want to get a sense of the industry that your hundred members are a part of.

The bulk of sales by all members on the island are to the mainland, but usually to the United States or internationally. Speaking from my own experience, probably only about 1% of my sales would be in the Maritimes and then maybe 10% would be to the rest of Canada and a pretty solid 60% to 70% to the United States.

We predominantly sell off-island. In the last five years that I've been doing this, I've noticed that the average wait time of customers for their parcels has increased.

I can't speak to whether mainland businesses would have a different experience, but I assume that they would because there is that additional distance from P.E.I., that additional isolation. I'm not entirely sure how we could be more competitive, but I imagine that having some level of sorting and processing on the island would maybe speed things up.

Okay. We've also heard different groups across the country talk about how their region is a destination for sales from other areas. So you guys are outbound sales.

Maybe, Ms. Walsh McGuire, you can tell us a little about how your businesses are competing against the online sales inbound and how Canada Post facilitates other people competing against local businesses?

I don't have specific statistics on competition for online retailers. I know that one of our members, John Barrett of Vesey's Seeds, will be speaking a little more about his experience.

Similar to what Katharine has said, we have heard a little from our membership about some delays with the changes in operations of sorting off-island. How significant that is would need to be factored into further consultation with our members.

I did note in the report general satisfaction from the business community nationally with the service of Canada Post, but I don't have a specific finger on the pulse of what our online retailers are saying in terms of service.

You talked about financial management, and I guess one of the major reasons why this task force was struck is to find a direction for Canada Post and determine whether or not we maintain the current model, that it be self-sustainable, that it have the same universal service charge, or what changes to the models need to be made.

The task force has come up with some different options with different dollar values. There is some overlap and they're not all additive. You don't get all of the benefits from slipping to alternate day delivery; if you also make another change, you might get some lost revenues on the other side.

I know that the community mailbox conversion was quite contentious here. Some of the conversions happened after the election in that one week before the new Prime Minister put the moratorium in place. How do you think people will feel and how would your members feel about a $400 million subsidy for Canada Post versus the complete move to community mailboxes across the country. What's the balance there?

My general observations from the membership—and again it would just be anecdotal because we certainly haven't conducted the consultation that the task force has—is that the implementation of the community mailboxes had very little impact on the business community. It was very much a residential concern.

I noted in my speaking notes that subsidies in the short term may need to be considered as we change Canada Post's way of operations, but our policy committee observed many of the same concerns that the task force has. What is the long-term sustainable plan for Canada Post in terms of their operations and the makeup of those their operations between the overhead and revenue?

Thank you very much for coming. It's nice to see someone from the chamber again. We heard from the Sydney chamber yesterday. I'm a former chamber guy, from the Calgary Chamber of Commerce. It's always nice to see business people as well coming in to present to the committee.

As my colleague mentioned, one of the reasons we're here is that there will be a $700-million shortfall by 2026. There are only two ways to deal with this. We find areas for savings, cuts, reductions, or we find ways for Canada Post to earn new revenue and hopefully turn a profit that goes toward the bottom line.

First, you all mentioned that it's a public service and that you're quite proud of it. You like the service you're receiving so far. Would you agree to paying higher corporate taxes to finance the subsidy to Canada Post in the interim until it's sustainable?

I think that in the short term, until a solution is identified for how we get to a more sustainable Canada Post model, it is a service that the business community needs. That was apparent in the report. We heard that loud and clear. Whether it's an online retailer, a catalogue retailer, or just general invoice, payment, and receipt letter mail, the business community does need the Canada Post service.

I think in the short term, if we needed to look at that...and not just a corporate business tax. It would also have to be a general consumer tax. Understanding that, yes, we would have to look at that, but we would want a model that is looking at the long haul for Canada Post and the long-term sustainability.

Perhaps I can follow up on that idea. Canada Post currently is the only organization allowed to deliver mail under 500 grams. This has come up repeatedly in terms of invoicing companies B2B, and invoicing their membership. Out west it's very common to do electronic invoicing, especially for business. The Chamber of Commerce in Calgary does e-invoicing for all the membership dues. At the organization I used to work for, with 6,000 members, we used to e-invoice.